How the Proposed Sh4.49 Trillion Budget for 2025/26 Will Be Spent

The Treasury has put together the Budget Policy Statement (BPS) for the financial year 2025/26. This document lays out the government’s financial plans, including revenue forecasts, spending priorities, and economic policies. It serves as a guide for resource allocation to key sectors, aligning with the government's economic goals.

The total budget for the next financial year is projected at Sh4.49 trillion. Expected revenue stands at Sh3.52 trillion, with the government focusing on improving tax collection and reducing wasteful spending. However, there remains a budget shortfall of Sh759.4 billion, representing 3.9% of the GDP, which will be financed through both local and foreign borrowing.

The BPS, which must be presented to Parliament by February 15 each year, outlines the government’s medium-term financial outlook covering three years. It includes projections on revenue collection, expenditure plans, and debt management strategies.

Sector Allocations and Priorities

The budget prioritizes key sectors in line with the Bottom-Up Economic Agenda. Below are the major allocations and focus areas:

Education – Sh718.8 Billion

• Expanding the Competency-Based Curriculum (CBC).

• Hiring and training teachers.

• Improving school and university infrastructure.

• Boosting funding for Technical and Vocational Education and Training (TVET).

• Increasing bursary and scholarship programs.

Healthcare – Sh204.9 Billion

• Expanding the Taifa Care and Social Health Authority (formerly NHIF).

• Upgrading healthcare facilities in counties.

• Strengthening maternal and child healthcare.

• Investing in digital health systems.

• Promoting local vaccine and pharmaceutical production.

Infrastructure, Transport, and Energy – Sh554.8 Billion

• Constructing 1,098.06 km of new roads.

• Building 62 new bridges.

• Completing Phase 1 of the Nairobi Railway City project.

• Expanding the electricity grid to connect 1.44 million new users.

• Developing solar and wind energy projects.

• Installing 38,871 km of high-speed fiber optic cable.

Agriculture and Food Security – Sh86.1 Billion

• Providing subsidized fertilizer to 1.5 million farmers.

• Expanding irrigation schemes (e.g., Mwea, Bura, Lower Nzoia).

• Supporting dairy, coffee, and tea farmers through cooperative financing.

• Investing in fisheries and aquaculture.

• Constructing agro-processing facilities.

Security and Defence(Sh279 Billion)

• Modernizing police and military equipment.

• Recruiting and training more security personnel.

• Strengthening cybercrime and intelligence capabilities.

• Improving national border security.

• Expanding police housing and welfare programs.

Governance, Justice, and Law Enforcement (Sh267.7 Billion)

• Enhancing judicial infrastructure and clearing case backlogs.

• Implementing electoral reforms ahead of the 2027 elections.

• Strengthening anti-corruption agencies.

• Expanding legal aid services for vulnerable groups.

• Improving e-Government services.

Social Protection and Welfare (Sh78.7 Billion)

• Supporting cash transfer programs for the elderly and vulnerable.

• Funding youth and women empowerment initiatives.

• Promoting disability inclusion programs.

• Investing in sports, arts, and culture.

• Assisting orphans and vulnerable children.

Digital Economy and ICT (Sh140.8 Billion)

• Expanding public Wi-Fi in both urban and rural areas.

• Digitalizing government services.

• Supporting fintech, e-commerce, and digital startups.

• Enhancing cybersecurity.

• Providing ICT training and incubation programs.

Affordable Housing and Urban Development (Sh90 Billion)

• Constructing 217,654 affordable housing units.

• Upgrading slums in major cities.

• Developing modern markets in urban areas.

• Increasing mortgage access for low-income earners.

• Improving sanitation and waste management in informal settlements.

Environmental Conservation and Climate Action (Sh134.2 Billion)

• Expanding Kenya’s tree-planting initiative (target: 15 billion trees by 2032).

• Developing climate resilience programs to address floods and droughts.

• Investing in waste recycling and clean energy.

• Protecting wildlife and marine ecosystems.

• Strengthening carbon trading mechanisms.

County Government Allocations (Sh442.7 Billion)

• Supporting county-level healthcare and Universal Health Coverage (UHC).

• Expanding county roads and infrastructure.

• Funding county-based industrial and agro-processing projects.

• Improving disaster preparedness and response at the county level.

The proposed budget reflects the government’s focus on economic growth, improved social services, and infrastructure development. With an emphasis on tax efficiency and expenditure control, the government aims to optimize resource utilization while managing debt levels effectively.